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News
Friday, July 25, 2025
What’s happening: Shares of Google-parent Alphabet rose on Thursday, while Tesla’s stock came under pressure following the release of quarterly results.
What happened: Alphabet’s quarterly results were driven by strong demand for cloud computing.
Meanwhile, Tesla has been feeling the heat due to tariff pressures and the expiration of regulatory credits. posted weaker-than-expected earnings.
How were the results: Alphabet’s revenues grew 14% year-over-year, while Tesla reported a decline in revenue for the second quarter.
Why it matters: Alphabet said that revenue from Google Search rose to $54.19 billion, from $48.51 billion in the year-ago quarter, while Google Cloud revenues climbed to $13.62 billion, from $10.35 billion, as acceleration in AI spend by companies resulted in higher demand for cloud computing services.
The company said that its AI chatbot, Gemini, now has over 450 million monthly active users.
Alphabet raised its capital expenditures forecast for 2025 to around $85 billion and indicated a further increase next year, with the intension of further developing cloud products and services.
Tesla recorded one of its weakest quarters in over a decade. Revenue contracted for the second straight quarter, with rising controversies over the company’s future under Elon Musk.
Tesla previously reported deliveries of 384,122 for the second quarter, compared to 443,956 in the year-ago quarter. Production edged lower to 410,244 units in the quarter, from 410,831 in the same quarter last year.
The company did not provide any outlook on its annual deliveries, amid declining sales of electric vehicles.
“Despite a sustained uncertain macroeconomic environment resulting from shifting tariffs, unclear impacts from changes to fiscal policy and political sentiment, we continue to make high value investments in CapEx and R&D, while ensuring a strong balance sheet,” the company said in a statement.
How shares responded: Alphabet’s shares rose 1% to close at $192.17 on Thursday, while Tesla’s shares tanked 8.2% to settle at $305.30.
What to watch: Investors will continue monitoring AI spend by companies, which is expected to provide a further boost to Alphabet’s results ahead.
Markets will also watch the expansion of Tesla’s vehicle offerings.
Context: The EUR/USD forex pair edged lower this morning, following the European Central Bank’s interest rate decision.
Details: ECB policymakers voted in favour of keeping interest rates unchanged at the latest. The ECB has announced 8 rate cuts over the past year, taking borrowing costs to their lowest level since November 2022.
Policymakers said they would continue to monitor the impact of tariffs on economic growth and inflation.
The EU has been in talks with the US to strike a trade deal to avoid Trump’s huge tariff rates. Markets look forward to a trade agreement and the tariff rate being cut to 15%.
On the economic data front, the HCOB Eurozone composite PMI surged to 51 in July, from 50.6 in the previous month. This represented the sharpest growth in private economic activity in 11 months. The figure topping market estimates of a 50.8.
Manufacturing PMI rose to 49.8 in July, from 49.5 in June, while services PMI surged to a six-month high of 51.2.
Strength in the US dollar exerted pressure on the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose about 0.2% to 97.58 this morning.
The EUR/USD pair slipped to 1.1745 this morning, while the EUR/GBP forex pair edged higher to 0.8701.
What to watch: Trade-related announcements from the US will remain in focus.
Data on Eurozone’s loans to companies (1200 UAE Time), loans to households (1200 UAE Time) and M3 money supply (1200 UAE Time) will be released today. Bank lending to non-financial corporations in the Eurozone, which rose by 2.5% year-over-year to €5.23 trillion in May, is expected to surge by another 2.5% in June.
Analysts expect bank lending to households to rise by 1.9% year-over-year in June, following 2.0% growth in the previous month, while M3 money supply in the Eurozone is projected to rise by 3.7% year-over-year in June, following a 3.9% rise in May.
Other Markets: Asian indices traded lower this morning, with the Nikkei 225, Hang Seng Index and Shanghai Composite Index down by 0.63%, 0.58% and 0.20%, respectively.
North Korea’s Kim Jong Un said Russia had his “unconditional” support in the ongoing war with Ukraine. The news sent the safe-haven US dollar index higher in forex trading this morning.
Ireland’s Credit Union Consumer Sentiment Index dipped to 59.1 in July, from 62.5 in the previous month. The region’s consumer confidence falling to a three-month low exerting pressure on the EUR/USD forex pair.
UK’s GfK Consumer Confidence Index fell to -19 in July, from -18 in the previous month, which sent the GBP/USD pair lower in forex trading this morning.
Core consumer prices in Tokyo’s Ku-area surged 2.9% year-over-year in July, below market estimates of 3%. Inflation remaining above the Bank of Japan’s target of 2% exerted pressure on the JPY/USD forex pair.
US S&P Global manufacturing PMI declined to 49.5 in July, missing market expectations of 52.6, which sent the Dow Jones index lower by more than 300 points on Thursday.
Germany’s Ifo business climate (1200 UAE Time), Ifo current conditions (1200 UAE Time) and Ifo expectations (1200 UAE Time), Italy’s business confidence (1200 UAE Time) and consumer confidence (1200 UAE Time), Russia’s interest rate decision (1430 UAE Time), Brazil’s FGV consumer confidence (1500 UAE Time), current account (1530 UAE Time), foreign direct investment (1530 UAE Time) and IPCA mid-month CPI (1600 UAE Time), India’s foreign exchange reserves (1530 UAE Time), US durable goods orders (1630 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time), as well as Canada’s budget balance (1900 UAE Time).
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